In Brief
Rajasthan State Electricity Board claimed depreciation on assets in its income tax return without applying the 75% restriction imposed by the Taxation Laws (Amendment) Act, 1991 for companies. The tax authority demanded additional tax under section 143(1-A). The Supreme Court held that section 143(1-A) cannot be mechanically invoked; it requires proof that the lesser amount in the return resulted from an attempt to evade tax. Since the assessee's claim resulted from a bona fide oversight and there was no intent to evade tax—especially as the assessee remained in loss even after the 25% disallowance—the demand was unjustified. The appeal was allowed.
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